Govt underinvesting in roading, says Treasury

A
Treasury paper says Labour has underinvested in roading
projects, says National Finance spokesman John Key.

The
June 2005 paper obtained under the Official Information Act
says: ‘The methods Transfund uses to conduct the
cost-benefit analyses appear to be sound – and may, in fact,
be underestimating the return from proposed projects. This
suggests substantial road infrastructure underinvestment:
New Zealand seems to be passing up road investments that
would earn a very high return…’

“This shows that the
Labour Government is being told by its economic advisers
that its analyses of the benefits of roading projects are
too conservative and that there is not enough investment,”
says Mr Key.

“The paper also suggests that there are very
high returns to be had in roading – higher than the returns
for typical private sector investments.

“This would
indicate that if Labour got the environment for public
private partnerships right, investors would be falling over
themselves to get involved.

“But in answer to a question
in Parliament yesterday, Acting Transport Minister Pete
Hodgson admitted not a single formal approach had been made
to the Government about a public private partnership.

“The
evidence suggests that the barriers placed in front of PPPs
by the Land Transport Management Act, which was passed with
heavy influence from the Greens, has had the desired
effect.”

Also of concern is that Treasury’s Briefing to
the Incoming Government noted (P16) that some regional
roading projects with low cost-benefits were being
funded.

“That indicates the priorities are skewed,” says
Mr Key. “Under Labour, low value projects are being funded
and ones with high values are not. No wonder road building
is in crisis in New
Zealand.”

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